1. These four appeals arise out of common facts and were, therefore, heard together. The appellant in Appeal Nos. 6/82 and 159/83 is Mrs.
Sheela Surabaly and the appellant in Appeal Nos. 8/82 and 158/83 is Mrs. Neena Raina.
(i) On 3-11-1981 during the course of a raid by the Officers of the Enforcement Directorate the residential premises of Mr. V. K. Raina were searched. On enquiry Mrs. Neena Raina gave reference to lockers in the name of Mr. Raina and the Officers were taken by her to the locker section of the Bank of Baroda in Greater Kailash Pt. I. The locker jointly in the name of Mr. and Mrs. Raina was then opened by Mrs. Raina and a search of the contents thereof disclosed, amongst other things, 10 gold bars of 10 Tolas each bearing foreign marks.
The locker was sealed and the key was taken away by the Officers of the Enforcement Directorate. The next day (4-11-1981) the locker was again opened by the Officers of the Directorate of Revenue Intelligence and they took possession of various articles therein including the above said 10 gold bars. Statements were then recorded from Mr. and Mrs. Raina as well as Mrs. Sheela Sumbaly and various others. Subsequently a show cause notice dated 2-2-1982 was issued to these two appellants and others. Notice had been issued to Mrs.
Sheela Sumbaly also since the investigation preceding the issue of show cause notice had disclosed that it was she who had brought the 10 gold bars and left them in the locker. Mrs. Raina replied that she was unaware of the contents of the package which she had allowed her mother to place in the locker for safe custody and it was only at the time of inspection of the locker on 3-11-1981 that she became aware that the cloth bag kept by her mother in the locker contained gold bars of foreign origin. She, therefore, denied, that she had been ever in conscious possession thereof. In other respects she adopted the reply of her mother, Mrs. Sheela Sumbaly. Mrs. Sumbaly had mentioned in her reply that she had received the cloth bag from her father-in-law for safe custody some time earlier and was taking it back to be returned to him when on the way she, halted in her daughter's house and at that time, for safe custody, left it in the locker of her daughter. She denied having admitted during the investigation her knowledge of the gold or the possession thereof with such knowledge. She further contended that the gold in question had been acquired by her father-in-law, Shri Dina Nath in 1946 in India itself (as it then stood) and there was, therefore, no contravention of any of the provisions of the Customs Act.
(ii) The show cause notice had been issued, to Mr. Raina as well as Mr. Dina Nath and his wife, Yamber Zali Sumbaly. But Shri Dina Nath Sumbaly and his wife, Mrs. Yamber Zali Sumbaly had expired on 24-3-1982 and 30-3-1982 respectively and notices were, therefore, returned with that endorsement.
(iii) On adjudication the Collector of Customs, New Delhi, exonerated Mr. Raina but he found the charges established against these two appellants, Mrs. Neena Raina and her mother, Mrs. Sheela Sumbaly. He ordered confiscation of the gold seized under Section 11 l(d) of the Customs Act and Section 71 of the Gold (Control) Act but ordered release of other articles. Under Section 112 of the Customs Act he imposed a penalty of Rs. 40,000 on Mrs. Sheela Sumbaly and another penalty of Rs. 10,000/- on her under Section 74 of the Gold (Control) Act. He imposed a penalty of Rs. 10,000/- on Smt. Neena Raina under Section 112 of the Customs Act but imposed no separate penalty on her under Section 74 of the Gold (Control) Act.
3. It is against the said order that these four appeals have been preferred to this Tribunal. We have heard Shri K.C. Aggarwal, Advocate, for the appellants and Shri K.C. Sachar, Departmental Representative, for the respondent Collector.
4. The fact of seizure of the 10 gold bars from the locker standing in the name of Mr. and Mrs. Raina is not in dispute. Nor it is disputed that they were gold bars with foreign markings but both the appellants claim that they were unaware of the contents of the cloth bag and were, therefore, never in conscious possession of the gold. They further contend that in any event no offence under the Customs Act is established with reference thereto for certain reasons advanced by them.
5. The first contention of Shri Aggarwal is that the gold in question had been seized on 3-11-1981 itself by the Officers of the Enforcement Directorate and as the said officers were not Customs Officers, no presumption could be raised as under Section 123 of the Customs Act and in the absence of such presumption no offence could be deemed to have been committed with reference thereto except on proof of actual contravention of the provisions of the Customs Act with reference to these gold bars. As earlier stated, the gold bars in question have foreign markings. They would, therefore, be notified goods under Section 123 of the Customs Act. In that event, if they had been seized by Customs Officers in the reasonable belief that they are smuggled goods, it would be for the appellants to prove that they are not smuggled goods. But the contention of Shri Aggarwal is that as the Officers of the Enforcement Directorate had made the seizure on 3-11-81 and as they are not Customs Officers, Section 123 does not come into play and, therefore, the department has to independently establish that these foreign marked gold bars had been at any particular time imported into India contravening the provisions of the Customs Act.
6. It is not disputed that the Officers of the Enforcement Directorate are not Customs Officers. But the case for the department is that the seizure of the gold bars in question was made not on 3-11-81 but on 4-11-81 only and as the said seizure was by Officers of the Directorate of Revenue Intelligence who are Customs Officers, the provisions of Section 123 come into operation and it would be for the appellants to prove that the seized gold bars were not smuggled goods. It is not disputed that the Officers of the Directorate of Revenue Intelligence are Customs Officers. Therefore, the main question would be whether the seizure of the gold in question was made on 3-11-81 or on 4-11-81.
7. The records disclose that the Panchnama for the actual seizure is dated 4-11-81. Shri Aggarwal, no doubt, points out that there is a Panchnama for 3-11-81 also but a reading of this Panchnama dated 3-11-81 shows that what had been actually seized on 3-11-81 was not the gold in question but various other articles in the residential premises of Mr. Raina. Even according to the appellants what had happened thereafter was that the Officers of the Enforcement Directorate accompanied Mrs. Raina to the Bank locker which was opened by her and the Officers took an inventory of the articles in the locker and then locked and sealed the same the key being taken away by the Officers.
Shri Aggarwal contends that once the key was taken away by the Officers that meant that the Officers had seized all the articles inside the locker and the fact that there was a formal seizure the next day on 4-11-81, is of no consequence. But seizure under the Customs Act has a special significance and various consequences follow from an actual seizure. The fact, that the person till then in possession is denied access at a particular point of time or his custody is terminated by the key of the locker being taken away, would not amount to a seizure by the Officers, the result of such denial of access being only at best detention without seizure. The Officers of the Enforcement Directorate were not interested in these articles (including the gold bars) which were seized the next day by the Officers of the Revenue Intelligence and it was only to prevent the articles being removed before the proper Officers could come and seize them, that the key of the locker had been taken away by the Officers of the Enforcement Directorate. We hold that there was no seizure on 3-11-81 and that the actual seizure took place on 4-11-81 only. That would mean that the seizure having been made by the Customs Officers under the reasonable belief that the seized articles were smuggled goods; the burden of proving that the subject gold bars were not smuggled goods shifted on to these two appellants.
8. Therefore, it is now to be considered whether the said burden had been discharged by either of these appellants. As earlier stated, the sequence of events was, even according to the appellants, that Mrs.
Sheela Sumbaly had come to New Delhi on the way from Hyderabad to Kashmir and while visiting her daughter (Mrs. Raina) at New Delhi Mrs.
Sumbaly, who had stayed over in New Delhi for a few days, requested Mrs. Raina for permission to keep certain articles in the locker of Mrs. Raina, and Mrs. Raina accommodated her and that is how the said cloth bag containing the subject gold bars came to be kept in the locker of Mrs. Raina. The question, therefore, to be considered is whether either Mrs. Sumbaly or Mrs. Raina had knowledge that the cloth bag contained gold bars of foreign marking and they were, therefore, in conscious possession thereof.
9. So far as Mrs. Raina is concerned, it is pointed out that in her statement on 5-11-1981 she bad stated that her mother carried a small bag in her purse which she left in the locker but that she herself (Mrs. Raina) did not know the contents of the cloth bag nor had she even handled it at any time. There is nothing in the statement of Mrs.
Sumbaly also to impute knowledge of the contents to Mrs. Raina. Nor is there any other evidence for the department which would establish that Mrs. Raina must have had the knowledge of the contents of the cloth bag. In addition, there is another portion of the statement of Mrs.
Raina which entirely probables her version that when the cloth bag was placed in her locker she was unaware of the contents thereof. It is seen that when she was examined on 5-11-1981 she had been questioned as to why on 3-11-1981 she had gone to the bank even before the Enforcement Officials visited the same with her. She said that when the officers came to the house on 3-11-81 for a search of the same they enquired her about the locker and at that time her mother called her aside and told her to go to the locker and remove the cloth bag since the same contained gold bars with which she (Mrs. Raina) had nothing to do. Mrs. Raina had stated that on being so informed by her mother, she went to the bank but was not allowed to open the locker and, therefore, returned back. This portion of the statement would wholly be in consonance with her version that she was unaware of the contents of the cloth bag when the mother left the same in the locker and, for the first time, became aware of the fact that the bag contained gold bars only when the officers came to the house for a search in connection with her husband's affairs.
10. No doubt, Mr. Dina Nath Sumbaly when he was examined on 5-11-1981 at Kashmir, evidently simultaneously, with the examination of the persons at New Delhi, had stated that his wife had gifted to the grand daughter (Mrs. Raina) the subject 10 gold bars and certain other gold ornaments at the time of the marriage of the grand daughter. This may suggest that Mrs. Raina must have come into possession of these gold bars even at the time of her marriage in 1967. But that is not the case of the department, the case of the department being that the gold bars had been brought by Mrs. Sheela Sumbaly and left in the locker, though, according to the department, with the knowledge of Mrs. Raina also. It must also be noted that the further statement of Mr. Dina Nath was that the gold bars have been left with his wife and it was she who had made the present to the grand daughter, he himself not having attended that marriage.
11. In the above circumstances, we are satisfied that at any rate so far as Smt. Neena Raina is concerned, there is no clinching evidence established that she was in conscious possession of these foreign marked gold bars, her case as to how the same came to be in her locker without her knowledge of the contents, being quite acceptable.
12. But so far as Mrs. Sheela Sumbaly is concerned, her statement made on 5-11-81 was that the gold bars had been given to her by her mother-in-law in May, 1980 when she had gone to visit the in-laws in Kashmir but that her husband as well as her father-in-law were not aware of the said entrustment. No doubt, in her subsequent statements or replies Mrs. Sumbaly had tried to make out that the answers had not been properly recorded or that they were not her answers. But it is seen that the statement of 5-11-1980 is entirely in her own hand (vide the photostat copy of the statement in the Paper-Book). Therefore there is nothing to support the subsequent disclaimer about the voluntary nature of the statement. In the said statement she had clearly admitted that she knew the contents of the cloth bag to be the 10 foreign marked gold biscuits and explained the same by saying that they were given to her by the mother-in-law in May, 1980 for safe custody and when she was taking them back to Kashmir she left them in the locker of her daughter for safe custody during the period of stay at New Delhi. In her subsequent statement recorded on 26-11-81 she had been questioned about the statement of her father-in-law about gold biscuits having been presented to the grand daughter during her marriage and she had then stated that only gold ornaments were presented to the grand daughter (her daughter) and no gold biscuits. In the face of these statements the explanation of Smt. Sumbaly, that she was unaware of the contents of the cloth bag until they were seized by the officers, is not at all acceptable.
13. As earlier mentioned, the statement of Shri Dina Nath is also to be taken into consideration in assessing the acceptability of the statements of Smt. Sumbaly and Smt. Raina. Shri Aggarwal contends that the maker of the statement (Shri Dina Nath) having died before the actual adjudication proceedings the statement cannot be looked into or acted upon. In this connection, he relies upon the decision of the Supreme Court in Jeth Mai v. Union of India (AIR 1970 S.C. 1310). We do not find anything in that judgment to support the above contention. The statement of Shri Dina Nath also having been recorded during the course of the enquiry after the seizure of the gold in question, the statement could be relied upon by the departmental officials though,Shri Dina Nath had subsequently died and was, therefore, not available for examination during the actual adjudication proceedings.
14. Another judgment to which reference was made by Shri Aggarwal during his arguments was Ambalal v. Union of India-AIR 1961 S.C. 264 : 1983 E.L.T. 1321 (S.C)]. He relied upon this on the question of burden of proof. No doubt, in the said case the burden of proof was said to lie on the department to prove that the goods in question had been smuggled into India. But that was on the basis that Section 178A of the Sea Customs Act did not cover the said case as the said Section was inserted subsequent to the order of confiscation of the goods. But in the present case it has been seen that the gold bars in question are admittedly foreign marked and under Section 123 of the Customs Act, the burden rests on the appellants to prove that they were not smuggled into India, in view of the fact that the goods had been seized on 4-11-81 by the Customs Officers under the reasonable belief that they are smuggled goods. Therefore, the observations in AIR 1961 SC 264 do not help the appellants in these appeals.
15. In the light of the above discussion, we hold that so far as Mrs.
Neena Raina is concerned, the findings against her under Section 112 of the Customs Act as well as under Section 74 of the Gold (Control) Act are concerned, they ought to be set aside. So far as Smt. Sheela Sumbaly is concerned, we hold that the findings against her Under Section 112 of the Customs Act as well as Section 74 of the Gold (Control) Act are concerned, they should be confirmed. The order of confiscation of the gold under Section 11 l(d) of the Customs Act and Section 71 of the Gold (Control) Act is also to be confirmed. But so far as the penalties imposed on Smt. Sheela Sumbaly are concerned, we observe that she is not a person alleged, or even suspected, to be regularly dealing in smuggled gold and indulging in similar activities.
She is an old lady, obviously belonging to a respectable family. While the offence itself has been established, we are of the opinion that the circumstances mentioned above warrant a lenient view in respect of penalties. We are satisfied that the penalty under Section 112 of the Customs Act imposed on her may be reduced to Rs. 10,000/- and the penalty under the Gold (Control) Act be reduced to Rs. 2.500/-.
16. Accordingly, Appeal Nos. C-8/82-NRB and GC-158/83-NRB preferred by Smt. Neena Raina are allowed and the penalty imposed on her is set aside. Appeal Nos. C-6/82-NRB and GC-159/83-NRB are dismissed except to the limited extent of reducing the penalties on Smt. Sheela Sumbaly to the extent indicated above.